Investing in rental properties in Istria can be a great financial move.
Istria is one of Croatia’s most popular tourist destinations, with a thriving tourism industry and a steady stream of income potential. With the right property and the right investments, the potential returns on investment (ROI) could be significant.
ROI on rental properties in Istria can vary depending on the location and the market conditions. Rental yields in Croatia’s capital, Zagreb, range from 5.4% to 6.1%. The Return on Investment (ROI) is typically expressed as a percentage of the cost of the investment. There are three key methods for calculating ROI on a rental property-simple ROI calculation, cap rate calculation, and cash on cash return calculation. The cap rate, or capitalization rate, is a common calculation used by investors when purchasing rental properties.
However, it is not the most accurate way to analyse a short term rental investment, as the value of a short term rental is based on closed comparable residential properties in the area. The cash on cash return calculation, or CoC, is the ratio of the property’s annual net operating income and the total amount of cash invested in the rental property. According to, prices on the Adriatic increased by as much as 11.7% in one year, in the city of Zagreb by 8.8%, while in other areas 4.1%. Therefore, the ROI on rental properties in Istria will depend on these factors and may range from 4.1% to 11.7%. Good numbers, right?
The first step to investing in rental properties in Istria is research. Knowing the local market and the right areas to invest in is key to finding the right property. Additionally, research into local taxes and regulations is important for understanding the full costs associated with a rental property.
Once the property has been purchased, the next step is to properly manage it. An efficient rental strategy is essential for the success of the property, as it can make or break its ROI. Keeping it up to date and in good condition, setting competitive rental rates, and taking advantage of any tax credits or benefits will all help maximise ROI.
Contact us for appropriate steps in maintaining the property, buy your new exclusive villa and look forward to years of strong returns.
